Instead, the Koreans are beaming with national pride at the sophistication of their advanced medical supplies and technology, and the country’s success in controlling the pandemic. Two of the princesses, Samsung Biologics and Celltrion, play right into that sentiment.
Just as its sibling Samsung Electronics makes memory chips for Apple’s iPhone, Samsung Biologics seeks to leverage the conglomerate’s manufacturing prowess to make drugs and vaccines for Big Pharma. Earlier this month, the company laid out an ambitious plan to build a fourth plant, its largest by far, boosting its total capacity 71 per cent and turning it into the world’s largest biopharmaceutical manufacturer. Meanwhile, Celltrion is introducing two coronavirus testing kits in the US; last month, its COVID-19 antibody drug entered phase one clinical trials.
EV battery manufacturing is another sector many Koreans see as COVID-proof (just look at Tesla Inc.’s stock). It’s also an area where the country already has an edge, given Samsung and LG are global leaders. The battery makers can see rising demand ahead. China has extended its EV subsidies until 2022 to support the industry, while the European Union has earmarked 30 per cent of its 1.8 trillion euro ($2.1 trillion), seven-year budget for climate-related spending.
And don’t forget, Korea has state-of-the-art internet infrastructure, which enables e-commerce and video gaming when people are stuck at home. Unlike traditional retail sales, Korea’s lockdown didn’t even make a dent in e-commerce. Online shopping has bigger penetration than in the US, accounting for about 30 per cent of the total retail value versus 20 per cent. This benefits Naver, Kakao and video-game developer NCSoft, the three internet princesses.
On a traditional price-to-earnings basis, none of the seven princesses is coming cheap. But what’s valuation in the world of easy money? As the Bank of Korea pushes its benchmark rate to near zero, future earnings – as far as a decade down the road – don’t need to be discounted.
You could even go a step further and argue the princesses are a more diversified bunch than FANGMAN, which all orbit around smartphones. The Koreans know better than to pin their hopes on one prince charming.
Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron’s, following a career as an investment banker, and is a CFA charterholder.